MFG 2.0

Goldman Sachs, Facebook, Nigerian Princes and Enron

As reported by the WSJ "Deal Journal", a recent email from Goldman Sachs to some of their wealthiest clients (and potential Facebook investors) bears a striking resemblance to another email -- the old standby "Nigerian Prince" spam scam.

Compare/contrast the whole thing at the WSJ page; here's an excerpt -- see if you can pick one from the other.

Here's the first:
"When you have a chance I wanted to find a time to discuss a highly confidential and time sensitive investment opportunity in a private company that is considering a transaction to raise additional capital.

‪‪For confidentiality reasons, I am unable to tell you the name of the company unless you agree not to use such information other than in connection with your evaluation of the investment opportunity and to keep all information that we reveal to you strictly confidential."

And the second:
"First, I must solicit your strictest confidence in this transaction. This is by virtue of it's nature as being utterly confidential and top sectret. I am sure and have confidence of your ability and reliability to prosecute a transaction of this great magnitude involving a pending transaction requiring maximum confidence."

Meanwhile, other sources are reporting the similarity of the Goldman/Facebook deal to another scam entirely -- remember Enron?

Since Facebook is a privately held company, not just anyone can acquire stock. But investment firm Goldman Sachs wants in, and it wants to give some of its wealthiest clients a shot of the action. Buy-in is $2 million. However, if Facebook gets more than 500 investors, SEC rules could force it to go public. Goldman has proposed the use of a special-purpose vehicle, raising questions about accountability...

...Goldman set Facebook's value at $50 billion and began soliciting money from the wealthier side of its client base. Each would have to put in $2 million a pop.

Now comes the interesting part: Goldman wants to put the monies raised into a special-purpose vehicle and manage the funds on behalf of its clients. The funds won't be subject to audit and Goldman won't have them on its books.

SPVs were used by Enron in its financial double-dealings in the late 1980s.

TAGS: Innovation
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